Online accounting software - a round-up (with special offer!)

Accounts and bookkeeping are the twin banes of every freelancer’s life. They are a hassle, and they distract you from doing what it is that you are actually good at.

Unfortunately, though, these activities are necessary evils. You have a legal responsibility to keep accurate accounts, and these will come in very useful when you come to fill in your annual Self Assessment tax return.

Luckily, there is an increasing number of affordable, easy-to-use accounting packages on the market. Many of these are ‘software as a service’ applications, meaning that they run online – and you can access them from anywhere with an internet connection.

The choice of accountancy packages can be overwhelming. We had a look at some of the major players in the market to find out who has the best-rounded offering.

Even better, Simply Business readers can get a great deal on our winning accountancy package. Scroll to the bottom for more information.

Clear Books

Clear Books says it aims to “free your time” – a noble cause indeed. This relative newcomer to the online accountancy market is growing rapidly, and adding new features all the time – some of which are not available in any other service we have found.

The first thing you will notice when you log in to Clear Books is the interface. Users are presented with a simple dashboard giving a clear overview of the current financial position. Different blocks detail money due from customers and owed to suppliers, as well as the amount available in your bank accounts. Further down the screen you will see a profit and loss report, and the total owing on your VAT account. The interface is clear and nonsense-free – although it would be nice to be able to move the blocks to suit your own preferences.

The software itself is remarkably intuitive. You can create a new customer with basic information in less than half a dozen clicks, and raising an invoice is simple. You can also import your bank statements easily, and this data will be reflected on your dashboard.

But it is some of the ‘under-the-hood’ extras that make Clear Books really shine – and make it particularly valuable for freelancers. For example, you can set up email reminders that will automatically chase clients who are late with payment – helping you to manage your cashflow better. If you are VAT registered, the software will generate reports to help you file your quarterly returns. Crucially, Clear Books also supports the flat rate VAT scheme – which many other online accountancy packages do not. Finally, nice little touches like a dashboard widget showing you where to find the cheapest petrol nearby show that the brains behind Clear Books are taking a well-rounded, in-depth approach to the development of their product.

We found Clear Books to be a simple and, dare we say it, enjoyable piece of software. It is well suited for freelancers and small business owners, and its starter package makes it one of the cheapest options on the market.

Kashflow

Kashflow is something of a stalwart in the online accountancy world. Their service is feature-rich, and offers a number of important tools that other packages lack.

To begin with, the Kashflow interface is rather less attractive than that offered by Clear Books. Everything is quite boxy, and there is a lot of scrolling involved to get to what you need. Basic financial overviews are present and correct, but it would be nice to have a bank balance widget on the dashboard.

Again, raising invoices and creating new customers are very simple tasks. Overdue payments can be chased automatically with email reminders, and VAT returns are easy to generate.

Kashflow excels in its reporting functionality. The list of automatically generated reports available can be overwhelming; everything from general overviews to specific customer-by-customer documents can be produced with a single mouse click.

Finally, and perhaps most importantly for some users, Kashflow also offers simple PayPal integration. You can import your PayPal data on an hourly or weekly basis, helping you to keep track of your sales more effectively.

Kashflow is a powerful piece of software, and PayPal integration is a major selling point. But the interface is perhaps due for an overhaul, and this could put off users accustomed to web 2.0 services.

FreeAgent

FreeAgent was designed with freelancers specifically in mind. This highly streamlined app is simple to use and boasts a number of impressive extras.

Like Clear Books, FreeAgent offers a clean and simple interface. Everything is easy to find, and you can raise invoices very quickly. Particularly impressive is the Contacts list, which shows everyone with whom you do business – along with an indication of how much you owe them, or how much they owe you.

FreeAgent’s extras are what make it particularly exciting. Perhaps the most important of these is the ‘tax timeline’. This is a simple calendar that sits on your dashboard, showing when your next tax deadline will occur. It also keeps track of your current tax position, helping to make sure that you are not faced with a n unexpected bill.

Expenses tracking is also particularly efficient. You can scan receipts for out-of-pocket expenses and attach them to your records, giving you peace of mind that you will have evidence in the event of a tax investigation.

Many freelancers swear by FreeAgent, and it is easy to see why. We think they are let down, though, by their pricing structure. Limited companies pay more each month than sole traders, which could be a major turn-of for one man bands.

So who comes out on top?

There is a great range of online accountancy applications available, each of which has some major selling points. But for its combination of usability, features and value for money, Clear Books is our favourite.

The people at Clear Books have kindly given Simply Business readers the opportunity to try their software at a heavily reduced rate. Click here to try Clear Books Premium for just £5 per month (usually £15 per month) for six months. Premium access includes unlimited transactions, unlimited users, free updates, and all-important VAT reporting. To take advantage of the deal, just enter the promotional code SIMPLY when signing up.

Photo: Alan Cleaver on flickr